Georgia Supreme Court Reaffirms Consent by Registration Theory of Personal Jurisdiction

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On September 21, 2021, in Cooper Tire & Rubber Company v. McCall, the Georgia Supreme Court reaffirmed the broad holding that any corporation registered to do business in Georgia is subject to general personal jurisdiction in Georgia courts. This expansive interpretation, especially in light of recent United States Supreme Court jurisprudence, was handed down despite growing concern about a corporate defendant’s federal rights under the Due Process Clause of the Fourteenth Amendment of the United States Constitution.

Cooper Tire & Rubber Company v. McCall

Tyrance McCall (Plaintiff) sued Cooper Tire & Rubber Company (Cooper Tire) in Gwinnett County, Georgia for negligence, strict product liability, and punitive damages after he sustained injuries in a motor vehicle accident. Plaintiff, a Florida resident, alleged that Cooper Tire, incorporated in Delaware with its principal place of business in Ohio, designed, manufactured, and sold the rear tire that caused the motor vehicle accident. The motor vehicle accident occurred in Florida.

Cooper Tire filed a motion to dismiss Plaintiff’s complaint for lack of personal jurisdiction, arguing it was a nonresident corporate defendant with minimal contacts in Georgia. Plaintiff countered that Cooper Tire’s business registration in Georgia made it a Georgia resident subject to personal jurisdiction in accordance with Allstate Insurance Co. v. Klein, 262 Ga. 599 (1992), which explicitly holds that a corporation registered to do business in Georgia is a Georgia resident for purposes of personal jurisdiction.

The trial court granted Cooper Tire’s motion to dismiss Plaintiff’s complaint for lack of personal jurisdiction. The Georgia Court of Appeals reversed the trial court citing Klein, and the Georgia Supreme Court granted Cooper Tire’s petition for a writ of certiorari.

Georgia’s Consent by Registration Analysis

The Georgia Supreme Court first adopted the “consent by registration” theory of personal jurisdiction in Klein, relying on the United States Supreme Court’s decision in Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling, 243 U.S. 93 (1917). In Pennsylvania Fire, the United States Supreme Court held that a corporation is not deprived of the Fourteenth Amendment’s guarantee of due process of law by a state statute notifying out-of-state corporations that they are consenting to general personal jurisdiction by registering and appointing an agent for service of process in that state. The rationale underlying this rule is simple: authorizing or naming an agent to receive service of process in the state is equivalent to consenting to the state’s exercise of general jurisdiction.

Though this rule underlies the Georgia Supreme Court’s decision in Klein and its reaffirmation in Cooper Tire, it is a stark contrast from the United States Supreme Court’s recent jurisprudence on general personal jurisdiction: namely, that corporations are usually only subject to general personal jurisdiction in their state of incorporation and principal place of business. Despite the fact that Pennsylvania Fire has not officially been overturned, only its rule still stands; its rationale has been roundly rejected, leaving tension between the ruling in Cooper Tire and the United States Supreme Court’s past decade of jurisprudence on general personal jurisdiction. The Georgia Supreme Court made little of this, indicating that Pennsylvania Fire still applies where there is a state registration statute or an interpretation of such a statute supporting the “consent by registration” theory. It dismisses contrary authorities by noting the lack of a corporate registration statute or any case law interpreting those statutes that might provide notice to those nonresident corporations that they have consented to general jurisdiction by registering to do business in that state.

Insights

The Georgia Supreme Court’s decision in Cooper Tire to reaffirm the principle announced in Klein will have far-reaching implications for corporate defendants in Georgia. The Georgia Supreme Court’s interpretation of Pennsylvania Fire—that registration is a permissible equivalent to consenting to the state’s general jurisdiction under the Due Process Clause of the Fourteenth Amendment—ensures that corporate defendants are subject to general personal jurisdiction in Georgia merely by registering to do business there.

Coincidentally, on the same day Cooper Tire was decided, the Pennsylvania Supreme Court heard oral arguments on a similar issue in Mallory v. Norfolk Southern Railway Company, whether business registration subjects a nonresident corporate defendant to general personal jurisdiction. Should courts across the country continue to skirt recent personal jurisdiction jurisprudence from the nation’s highest court, the United States Supreme Court may step in and clarify its position on Pennsylvania Fire.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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